Growth Strategy
Q: Is policy count growth sustainable?
A: Management highlighted improving pipeline efficiency and agent engagement that drove 2.7% voluntary premium growth and consistent policy count increases over five quarters, underscoring a broad-based, organic growth approach.

Underwriting Margin
Q: What was the Q2 ELCM value?
A: The reported ELCM of 1.48 reflects disciplined underwriting and proactive pricing despite compressed loss cost pressures in a competitive market.

Pricing & Loss Cost Outlook
Q: When will loss costs bottom out?
A: They cautioned that with approved loss costs declining 8–9%, rising combined ratios may eventually prompt rate adjustments, especially with factors like Florida’s reimbursement changes being closely monitored.

Reserve Development
Q: Why is reserve development lower this quarter?
A: Favorable development was $8M this quarter versus $10.9M previously, attributed to timing differences in case resolutions and consistent reserving practices that reflect individual claim outcomes.

Retention Management
Q: How do rate hikes impact retention?
A: While pricing adjustments are necessary for underwriting profitability, management maintains that deep account knowledge and proactive service help sustain strong retention levels even if rates are adjusted.

Audit Premium Comparison
Q: What was last year’s Q3 audit premium?
A: The Q3 ’23 audit premium stood at $5.6M, compared to the current quarter’s $4.8M, reflecting variable impacts from wage inflation on premium volumes.

Expense Ratio Trends
Q: Why did the expense ratio rise 90 bps?
A: The increase is due to upfront investments in sales and underwriting functions aimed at driving future growth, with expectations that expenses will level off over time.

Large Claims Frequency
Q: How many claims exceeded $1M in six months?
A: In the past six months, there were only 4 claims over $1M, indicative of proactive claims management and historically low frequency of high-severity losses.

Policy Growth Source
Q: Is growth concentrated in specific channels?
A: Growth has been broad-based across independent agents with no concentration in a single distribution channel or geography, reflecting enhanced pipeline efficiency.

Severity Costs Outlook
Q: How will Florida fee changes affect severity?
A: Although Florida’s fee schedule increases may pressure reimbursement levels, established provider networks help mitigate the cost impact, and such factors are already being integrated into pricing strategies.

Construction Market Trends
Q: What is the impact of wage inflation?
A: Wage inflation of around 6% is steadily boosting insured payrolls among small and midsized employers, supporting overall premium growth despite a challenging market environment.